FBI Fails to Pay Phone Bills on Critical Surveillance

By failing to pay its phone bills on time, the FBI had the line cut on a wiretap in a national security investigation ordered by the Foreign Intelligence Surveillance Act, and missed other opportunities to collect key surveillance, according to a government report released Thursday.

"Telecommunications carriers actually disconnected phone lines established to deliver surveillance results to the FBI, resulting in lost evidence, including an instance where delivery of intercept information, required by a Foreign Intelligence Surveillance Act order, was halted, due to untimely payment," Justice Department Inspector General Glenn Fine noted in the report.

The review, which looked at how the FBI uses confidential funds to support its covert and undercover activity, found several problems and challenges in how the bureau tracks and monitors these funds, which hide the bureau's identity from criminals, vendors and public disclosure.

According to the report, the FBI receives invoices from telecommunication carriers for surveillance connections and renewal costs each month.

"As part of our audit, we analyzed 990 telecommunication surveillance payments made by five field divisions, and found that over half of these payments were not made on time," a summary of the report noted.

The costs of maintaining crucial intercepts pile up, according to the report, which noted, "Lacking such [FBI] headquarters-issued procedures, FBI field divisions have instituted separate, ad hoc tracking mechanisms, which had mixed results in paying bills on time.

"For example, a primary carrier sent a list to one of the field divisions we tested, detailing $66,000 in unpaid telecommunication costs resulting from surveillance activity."

FBI Assistant Director John Miller acknowledged that the bureau's financial management system, which dates back to the 1980s, is not sufficient.

"The FBI will not tolerate financial mismanagement, or worse, and is addressing the issues identified in the audit," he said, in a statement released today.

"Every effort is being made to either implement the recommendations, or otherwise put in place corrective actions to ensure appropriate oversight," Miller's statement continued.

However, he downplayed the effect the failure to pay phone bills has had on FBI operations.

"While in a few instances, late payment of telephone bills resulted in interruptions of monitoring, these interruptions were temporary, and in our assessment, none of those cases were significantly affected," the statement said.

The report also mentioned that the loose accounting of the confidential funds allowed a telecommunication specialist to steal more than $25,000 from an FBI field office. The employee pleaded guilty to the theft in June 2006.

"The investigation showed that the employee took advantage of weak controls over field division confidential funds, to convert FBI moneys for her own use," the report noted.

The FBI has determined that most of the 87-page audit was too sensitive for release.